Middle-aged borrowers piling on student debt

posted by Lana N. | 3pt
April 25, 2013

Reuters reports a disturbing new trend in student debt. While student loan debt has gone up for every age group over the past three years, it has grown the most for middle-aged borrowers between the ages of 39-45, the start of a new debt phenomenon. The credit score tracking company who provided data for the study suggests that this new debt group has been forced to seek mid-career training due to widespread economic hardship.

(Reuters) - Middle-aged borrowers are piling up student debt faster than any other age group, according to a new analysis obtained by Reuters.

Educational borrowing is up for every age group over the past three years, but it has grown far more quickly among those between 35 and 49, according to the analysis of more than 3 million credit reports provided to Reuters by the credit score tracking site CreditKarma (CreditKarma.com). That group saw its school debt burden increase by a staggering 47 percent, according to the analysis.

The average student loan debt for those aged 38 to 41 was the biggest of that group -- about $12,000, up from just under $9,000 in 2009. Young people still carry the biggest student loan burdens; those aged 26 to 29 have an average of $14,000 in student debt. But the increased levels in middle-aged student debt is a new phenomenon.

Credit Karma CEO Kenneth Lin says the reason is obvious: The tough economy has pushed people to seek mid-career training.

"More and more people are going back to school," he says. "High unemployment, rising tuition costs, artificially low interest rates from the government, and increased for-profit school advertising... (adds up to) consumers taking on student loan debt at an alarming pace."